Bill Text: MS SB2847 | 2021 | Regular Session | Introduced
Bill Title: Mississippi Small Business Recovery and Revitalization Program; establish under Mississippi Development Authority.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2021-02-02 - Died In Committee [SB2847 Detail]
Download: Mississippi-2021-SB2847-Introduced.html
MISSISSIPPI LEGISLATURE
2021 Regular Session
To: Business and Financial Institutions; Finance
By: Senator(s) Horhn
Senate Bill 2847
AN ACT TO AMEND SECTIONS 57-10-501 THROUGH 57-10-525, MISSISSIPPI CODE OF 1972, TO REPURPOSE THE MISSISSIPPI SMALL BUSINESS ASSISTANCE ACT INTO A MISSISSIPPI SMALL BUSINESS RECOVERY AND REVITALIZATION PROGRAM; TO AUTHORIZE THE MISSISSIPPI DEVELOPMENT AUTHORITY TO CONTRACT WITH PRIVATE ENTITIES TO PROVIDE PROFESSIONAL SERVICES TO SMALL BUSINESSES INCLUDING TAX PREPARATION, EMPLOYEE PAYROLL, WORKING CAPITAL, OUTSTANDING BUSINESS EXPENSE AND ADAPTIVE BUSINESS PRACTICES NEEDED TO REMAIN OPEN DURING THE ECONOMIC DOWNTURN; TO INCREASE THE AMOUNT THAT MAY BE LOANED TO INDIVIDUAL APPLICANTS UNDER THE PROGRAM; TO INCREASE THE AUTHORIZED BONDED INDEBTEDNESS WHICH MAY BE INCURRED BY THE MISSISSIPPI DEVELOPMENT AUTHORITY TO FUND THIS PROGRAM; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 57-10-501, Mississippi Code of 1972, is amended as follows:
57-10-501. This article shall be known and may be cited as the Mississippi Small Business Recovery and Revitalization Assistance Act.
SECTION 2. Section 57-10-503, Mississippi Code of 1972, is amended as follows:
57-10-503. It is the purpose of this article to promote economic and community development in the State of Mississippi through the planning and development districts in Mississippi by providing assistance for job creation and retention and small business development and to authorize the issuance of state bonds or notes for funding such assistance. From and after July 1, 2021, it shall be the additional purpose of this article to provide professional services, working capital, outstanding business expenses and adaptive business practices to small businesses needed to remain open during an economic downturn.
SECTION 3. Section 57-10-505, Mississippi Code of 1972, is amended as follows:
57-10-505. The following words and phrases when used in this article shall have the meaning given to them in this section unless the context clearly indicates otherwise:
(a) "Assistance" means a loan to a small business or an equity investment in a small business by a planning and development district in accordance with this article.
(b) "DECD" means the Mississippi Development Authority.
(c) "Equity investment" means an investment in the ownership of a small business incorporated in Mississippi by a planning and development district in accordance with this article.
(d) "General Fund" means the General Fund of the State of Mississippi.
(e) "Loan" means a loan by a planning and development district to a small business in accordance with this article.
(f) "MDA" means the Mississippi Development Authority.
(g) "Planning and development districts" means an organized planning and development district in Mississippi.
(h) "Program" means the Mississippi Small Business Recovery and Revitalization Assistance Program established in this article.
(i) "Qualified entities" means small business investment corporations, community development corporations and other similar entities approved by the Mississippi Business Finance Corporation to participate in the program.
(j) "Seller" means the State Bond Commission.
(k) "Small business" means any commercial enterprise with less than one hundred (100) full-time employees, less than Seven Million Dollars ($7,000,000.00) in net worth or less than Seven Hundred Fifty Thousand Dollars ($750,000.00) in net annual profit after taxes.
SECTION 4. Section 57-10-507, Mississippi Code of 1972, is amended as follows:
57-10-507. There is hereby
established, under the direction of * * * MDA, a program to be known as the
Mississippi Small Business Assistance Program for the purpose of making grants
to the planning and development districts and qualified entities for their use
in providing assistance to small businesses in accordance with this article for
the purpose of creating and retaining jobs and small business development. From
and after July 1, 2021, the program shall be known as the Mississippi Small
Business Recovery and Revitalization Program whose additional purpose shall be
to provide professional services, working capital, and adaptive business
practices to small businesses needed to remain open during an economic
downturn.
SECTION 5. Section 57-10-509, Mississippi Code of 1972, is amended as follows:
57-10-509. (1) Any
planning and development district or qualified entity desiring to participate
in the Mississippi Small Business Recovery and Revitalization Program
shall make application for a grant to * * * MDA in a form satisfactory to * * * MDA.
(2) The application must
indicate that the planning and development district or qualified entity has
established a small business assistance review board to review applications for
assistance under the program and make recommendations thereon to the board of
directors of the planning and development district or governing board of a
qualified entity in accordance with this article. The planning and development
district or qualified entity shall provide such other assurances of their
ability to administer and manage the program in accordance with this article as
may be reasonably required by * * * MDA. An eligible community
development corporation shall execute a memorandum of agreement with the
planning and development district(s) having such jurisdiction as may be
concurrent with that of the community development corporation.
SECTION 6. Section 57-10-511, Mississippi Code of 1972, is amended as follows:
57-10-511. MDA shall grant
funds under * * * the Mississippi Small Business Recovery and
Revitalization Act to a planning and development district or qualified
entity in accordance with the following terms and conditions:
(a) Grant funds received by a planning and development district or qualified entity in accordance with this article shall be used by the planning and development district or qualified entity to establish a revolving assistance fund for the purpose of providing assistance to small businesses in accordance with this article. Except as otherwise allowed in this article, all principal and interest payments by small businesses in repayment of such assistance shall be eligible for and used by the planning and development district or qualified entity for additional assistance to small businesses in accordance with this article. From and after July 1, 2021, such assistance shall include professional services, tax preparation, working capital, payment of outstanding business expenses and other adaptive business practices needed to remain open during an economic downturn.
(b) Each planning and development district meeting the criteria set forth in this article shall receive an initial grant of not to exceed One Million Dollars ($1,000,000.00) for the purpose of establishing the program within its area in accordance with this article. Each qualified entity meeting the criteria set forth in this article shall be eligible to receive an initial grant of Five Hundred Thousand Dollars ($500,000.00) for the purpose of establishing the program within the area it serves in accordance with this article. The total amount of initial grants to planning and development districts shall not exceed Ten Million Dollars ($10,000,000.00) and the total amount of initial grants for qualified entities shall not exceed Two Million Dollars ($2,000,000.00). Each planning and development district or qualified entity receiving an initial grant shall have twelve (12) months in which to make binding commitments to provide assistance to small businesses in the principal amount of the initial grant in accordance with this article. Grant funds not committed to provide assistance to small businesses at the end of twelve (12) months after receipt thereof by the planning and development district or qualified entity shall be returned to MDA for placement in a pool to be redistributed by MDA to planning and development districts or qualified entities which have binding commitments to distribute as assistance all their initial grant funds and have pending applications for additional assistance in accordance with this article. Any planning and development district or qualified entity returning any such grant funds to MDA shall be required at the time such initial grant funds are returned to deliver to the State Treasury, for deposit in the General Fund, interest on the amount of such returned funds at the same rate as any bonds or notes of the State of Mississippi issued pursuant to this article to provide such grant funds.
(c) After all of the initial grant funds have been provided as assistance to small businesses in accordance with this article, MDA shall distribute additional grant funds to each planning and development district or qualified entity qualified under this article to receive and requesting such funds in whatever amounts MDA deems appropriate and when needed by such planning and development districts or qualified entities to provide additional assistance to small businesses in accordance with this article. The schedule for distributing such funds shall be determined by MDA. Funds distributed to planning and development districts and qualified entities pursuant to this paragraph shall be in addition to funds distributed to planning and development districts and qualified entities pursuant to paragraph (b) of this section. The total amount of grants issued pursuant to this paragraph shall not exceed Twenty Million Dollars ($20,000,000.00) for planning and development districts or qualified entities. Grant funds not committed to provide assistance to small businesses at the end of twelve (12) months after receipt thereof by the planning and development district or qualified entity shall be returned to MDA for placement in a pool to be redistributed by MDA to planning and development districts or qualified entities which have binding commitments to distribute as assistance all their initial grant funds and have pending applications for additional assistance in accordance with this article. Any planning and development district or qualified entity returning any such grant funds to MDA shall be required at the time such grant funds are returned to deliver to the State Treasury, for deposit in the General Fund, interest on the amount of such returned funds at the same rate as any bonds or notes of the State of Mississippi issued pursuant to this article to provide such grant funds.
(d) A planning and development district or qualified entity participating in the program may utilize an amount equal to not more than fifty percent (50%) of interest earned on assistance provided to small businesses in accordance with this article or three percent (3%) of the current annual loans disbursed, whichever is the lesser amount, for administration and management of the program, unless specifically authorized to utilize more by MDA; however, any interest earned on grant funds held by a planning and development district or qualified entity prior to the utilization of such grant funds to provide assistance to small businesses shall be placed in the revolving assistance fund of the planning and development district or qualified entity and shall not be expended for administration or management costs. Planning and development districts and qualified entities may retain an amount equal to fifty percent (50%) of the interest earned on repayment funds that are being held on deposit in anticipation of relending, or three percent (3%) of the current annual loans disbursed, whichever is the lesser amount, to aid in the administration and management of the program. Each planning and development district and qualified entity shall file annually with the Secretary of the Senate and the Clerk of the House of Representatives not later than the first day of each regular legislative session a report which details any interest retained or utilized by the planning and development district or qualified entity pursuant to this paragraph (d).
(e) If a planning and development district or qualified entity participating in the program experiences losses from assistance provided pursuant to the program in excess of sixty percent (60%) of the amount of grant funds received by the planning and development district or qualified entity, the planning and development district or qualified entity shall repay the State of Mississippi the amount of such losses in excess of sixty percent (60%) by delivering that amount to the State Treasury for deposit in the General Fund.
(f) MDA shall assist each planning and development district or qualified entity participating in the program in connection with such planning and development district's or qualified entity's compliance with this article.
(g) Each planning and
development district or qualified entity participating in the program shall
submit the following reports to * * * MDA:
(i) An annual audit of grant funds received in connection with the program; and
(ii) A semiannual report on July 30 and January 30 of each year, describing all assistance provided to small businesses pursuant to the program, such reports to include, without limitation, the following: a description of each small business receiving assistance; the project to be assisted and purpose of assistance; a description of each loan and equity investment, including the terms and conditions thereof and use of the assistance funds by the small business; history of the assistance pool, including principal amount loaned, interest earned, interest expended for administration and management, principal amount of equity investments, assistance funds available, and losses; and a statement of jobs created or retained as a result of the assistance program.
(h) If MDA determines that a district or entity has provided assistance to small businesses in a manner inconsistent with the provisions of this article, then the amount of such assistance so provided shall be withheld by MDA from any additional grant funds to which the district or entity becomes entitled under this article. If MDA determines, after notifying such district or entity twice in writing and providing such district or entity a reasonable opportunity to comply, that a planning and development district or qualified entity has consistently failed to comply with this article in connection with the program, MDA may declare such planning and development district or qualified entity in default under the program and, upon receipt of notice thereof from MDA, such planning and development district or qualified entity shall immediately cease providing assistance under the program, shall refund to MDA for distribution to other planning and development districts or qualified entities all funds held in its revolving assistance fund and, if required by MDA, shall convey to MDA all administrative and management control of assistance provided by it under the program.
(i) If MDA determines, after notifying a planning and development district or qualified entity twice in writing and providing copies of such notification to each member of the Legislature in whose district or in a part of whose district such planning and development district or qualified entity is located and providing such district or entity a reasonable opportunity to take corrective action, that a planning and development district or a qualified entity administering a revolving assistance fund under the provisions of this article is not actively engaged in lending as defined by the rules and regulations of MDA, MDA may declare such planning and development district or qualified entity in default under the program and, upon receipt of notice thereof from MDA, such planning and development district or qualified entity shall immediately cease providing assistance under the program, shall refund to MDA for distribution to other planning and development districts or qualified entities all funds held in its revolving assistance fund and, if required by MDA, shall convey to MDA all administrative and management control of assistance provided by it under the program.
(j) Notwithstanding any other provision of this article to the contrary, if federal funds are not available for commitments made by a planning and development district to provide assistance under any federal loan program administered by the planning and development district in coordination with the Appalachian Regional Commission or Economic Development Administration, or both, a planning and development district may use funds in its revolving assistance fund, which have not been committed otherwise to provide assistance, for the purpose of providing temporary funding for such commitments. If a planning and development district uses uncommitted funds in its revolving assistance fund to provide such temporary funding, the district shall use funds repaid to the district under the temporarily funded federal loan program to replenish the funds used to provide the temporary funding. Funds used by a planning and development district to provide temporary funding under this paragraph (j) must be repaid to the district's revolving assistance fund no later than twelve (12) months after the date the district provides the temporary funding. A planning and development district may not use uncommitted funds in its revolving assistance fund to provide temporary funding under this paragraph (j) on more than two (2) occasions during a calendar year. A planning and development district may provide temporary funding for multiple commitments on each such occasion. The maximum aggregate amount of uncommitted funds in a revolving assistance fund that may be used for such purposes during a calendar year shall not exceed seventy percent (70%) of the uncommitted funds in the revolving assistance fund on the date the district first provides temporary funding during the calendar year.
(k) Nothing in this article shall affect or defeat any claim, assessment, appeal, suit, right or cause of action by the state for loan payments or repayments or penalties against entities receiving loans made under authority of this article prior to July 1, 2021.
SECTION 7. Section 57-10-513, Mississippi Code of 1972, is amended as follows:
57-10-513. The planning and development districts and qualified entities are authorized, empowered and directed to deposit all grant funds received pursuant to this article in a revolving assistance fund and to provide assistance therefrom to small businesses in accordance with this article and the following criteria, terms and conditions:
(a) To be eligible for assistance under this article, the small business and the project to be assisted must meet the following criteria:
(i) Assistance must be in connection with an identifiable project or business plan, and the principal amount of all assistance may not exceed fifty percent (50%) of the total cost of said project or business plan;
(ii) Assistance may be used in connection with the purchase or lease of land, buildings, equipment and inventory, and for working capital; provided, however, no more than one-third (1/3) of the total assistance to a small business pursuant to this article or Fifty Thousand Dollars ($50,000.00), whichever is less, may be used for working capital;
(iii) Assistance may not be provided for speculative land or real estate investments;
(iv) Assistance may not be provided under the program to finance or satisfy any existing debt;
(v) Assistance may
not be provided to a small business unless at least sixty percent (60%) of the
small business is owned, directly or indirectly, by individuals who have been
residents of the State of Mississippi for two (2) years immediately
prior to the application for assistance; * * *
(vi) The project
or business plan for which assistance is provided must create or retain full-time
jobs, and the planning and development district or qualified entity must
receive a certificate to that effect from the small business before any
assistance is provided * * *;
and
(vii) From and after July 1, 2021, assistance may be used to provide professional services, technical assistance, tax preparation, employee payroll, working capital, outstanding business expenses and adaptive business practices to small businesses needed to remain open during an economic downturn.
(b) The interest rate on loans shall not be less than five percent (5%) per annum or more than four percent (4%) above the federal discount rate, plus the servicing fees established in this article.
(c) As security for any loan under the program, the planning and development district or qualified entity shall take a security interest in assets of the small business and require personal guarantees of all persons and entities owning twenty percent (20%) or more of the small business. Such security interests may be subordinate to other security interests in such assets.
(d) The maximum term of any loan under the program shall not exceed the following: fifteen (15) years if used to purchase or lease land or buildings, ten (10) years if used to purchase or lease equipment, five (5) years if used to provide working capital and three (3) years if used to purchase inventory.
(e) In the event of a default by a small business on a loan under the program, the planning and development district or qualified entity shall foreclose and enforce its security interests and personal guarantees relating to such loan and take all necessary and appropriate action to recover all principal and interest owed, and all amounts so recovered shall be deposited in the revolving assistance fund administered by said planning and development district or qualified entity. Any small business which defaults on a loan under the program shall not be eligible for any other loan under the program.
(f) A planning and development district or qualified entity may acquire, subscribe for, own, hold, sell, assign, transfer, mortgage or pledge an equity investment in a small business incorporated under the laws of the State of Mississippi, provided such equity investment constitutes less than fifty percent (50%) of the voting shares of the small business and does not exceed Fifty Thousand Dollars ($50,000.00), and while the owner or holder thereof, the planning and development district or qualified entity may exercise all the rights, powers and privileges of ownership, including the right to vote thereon. Any such equity investment in a small business may be redeemed by such small business upon payment to the planning and development district or qualified entity of the principal amount of such equity investment, plus six percent (6%) interest, compounded annually from the date of such equity investment, provided such repayment is tendered within seven (7) years of the date of such equity investment.
(g) A planning and development district or qualified entity shall not utilize more than one-third (1/3) of all grant funds received for equity investments in small businesses.
(h) No small business
shall receive assistance under the program in excess of * * *
Three Hundred Thousand Dollars ($300,000.00).
(i) All assistance applications must be reviewed by, and the terms and conditions of the assistance must be recommended to the planning and development district or qualified entity, by a small business assistance review board established by the planning and development district or qualified entity, consisting of the following members appointed by the planning and development district or qualified entity:
(i) Two (2) individuals with current experience in banking or finance;
(ii) Two (2) principal or majority owners of private, for-profit commercial enterprises qualifying as small businesses under this article;
(iii) One (1) senior officer of a private, for-profit commercial enterprise not qualifying as a small business under this article or the executive director of an industrial or economic development foundation;
(iv) One (1) individual who is a minority and who has current experience in banking or finance or who is the principal or majority owner of a private, for-profit commercial enterprise qualifying as a small business under this article; and
(v) One (1) individual who is female and who has current experience in banking or finance or who is the principal or majority owner of a private, for-profit commercial enterprise qualifying as a small business under this article.
As used in this paragraph, "minority" shall mean individuals who are Asian, Black, Hispanic or Native American as defined in Section 31-7-13(s), Mississippi Code of 1972.
All members of such small business assistance review boards shall be residents of the area served by the planning and development district or qualified entity. Small business assistance review boards shall meet at least quarterly and shall meet anytime there are at least two (2) assistance applications pending that require review.
(j) If the small business assistance review board recommends that assistance be provided, the planning and development district or qualified entity may either approve and provide the assistance on the exact terms and conditions recommended by the small business assistance review board or determine not to provide such assistance. Under no circumstances may the planning and development district or qualified entity provide such assistance on any terms or conditions not approved and recommended by the small business assistance review board. If the planning and development district or qualified entity determines not to provide the assistance that the small business assistance review board has recommended to be provided, the board of directors of such district or the governing body of such entity shall place in its minutes an explanation of the reasons for such refusal. If the small business assistance review board recommends against providing the assistance, the board of directors of the planning and development district or the governing body of the qualified entity may not determine to provide such assistance under any terms and conditions.
SECTION 8. Section 57-10-515, Mississippi Code of 1972, is amended as follows:
57-10-515. The planning and
development districts and qualified entities are hereby authorized to engage
legal counsel, accountants, financial advisors, appraisers, consultants and
others as needed in connection with providing assistance to small businesses
pursuant to * * * the Mississippi Small Business Recovery and
Revitalization Program, and to charge the costs of these services to the
small businesses receiving such assistance or charge the proceeds of such
assistance therefor. To the extent required by * * * MDA, such professional services
shall be engaged on a statewide program basis.
SECTION 9. Section 57-10-517, Mississippi Code of 1972, is amended as follows:
57-10-517. (1) DECD shall adopt and publish the eligibility criteria for planning and development districts and qualified entities to participate in the Mississippi Small Business Recovery and Revitalization Program as set forth in this article, a timetable and process for review of applications from planning and development districts or qualified entities, and program report forms, all in accordance with this article, and such other rules and regulations as may be necessary and appropriate in carrying out its responsibilities under this article; provided, however, that planning and development districts or qualified entities shall have sole authority over the approval of assistance and the management of the assistance provided under this article.
(2) The Mississippi Association of Planning and Development Districts shall prepare and adopt such uniform applications, forms, procedures and requirements for use in connection with the program as they deem necessary and appropriate.
SECTION 10. Section 57-10-521, Mississippi Code of 1972, is amended as follows:
57-10-521. (1) There is hereby created a special fund in the State Treasury to be known as the Mississippi Small Business Recovery and Revitalization Assistance Fund out of which grants and expenditures authorized in connection with the program shall be disbursed. All monies received by issuance of bonds to carry out the purposes of this article shall be deposited into the Mississippi Small Business Assistance Fund.
(2) All funds repaid to the State Treasury under this article or designated hereunder for repayment of any bonds issued under this article shall be delivered to the State Treasurer for deposit in the General Fund.
SECTION 11. Section 57-10-525, Mississippi Code of 1972, is amended as follows:
57-10-525. (1) The seller
is authorized to borrow, on the credit of the state, money not exceeding the
aggregate sum of * * * One Hundred
Million Dollars ($100,000,000.00), not including money borrowed to refund
outstanding bonds, notes or replacement notes, as may be necessary to carry out
the purposes of this article. The rate of interest on any such bonds or notes
which are not subject to taxation shall not exceed the rates set forth in
Section 75-17-101, Mississippi Code of 1972, for general obligation bonds.
(2) As evidence of indebtedness authorized in this article, general or limited obligation bonds of the state shall be issued from time to time to provide monies necessary to carry out the purposes of this article for such total amount, in such form, in such denominations, payable in such currencies (either domestic or foreign or both), and subject to such terms and conditions of issue, redemption and maturity, rate of interest and time of payment of interest as the seller directs, except that such bonds shall mature or otherwise be retired in annual installments beginning not more than five (5) years from the date thereof and extending not more than twenty (20) years from the date thereof.
(3) All bonds and notes issued under authority of this article shall be signed by the chairman of the seller, or by his facsimile signature, and the official seal of the seller shall be affixed thereto, attested by the secretary of the seller.
(4) All bonds and notes issued under authority of this article may be general or limited obligations of the state, and the full faith and credit of the State of Mississippi as to general obligation bonds, or the revenue derived from projects assisted as to limited obligation bonds, are hereby pledged for the payment of the principal of and interest on such bonds and notes.
(5) Such bonds and notes and the income therefrom shall be exempt from all taxation in the State of Mississippi.
(6) The bonds may be issued as coupon bonds or registered as to both principal and interest as the seller may determine. If interest coupons are attached, they shall contain the facsimile signature of the chairman and the secretary of the seller.
(7) As to bonds issued hereunder and designated as taxable bonds by the seller, any immunity of the state to taxation by the United States government of interest on bonds or notes issued by the state is hereby waived.
SECTION 12. This act shall take effect and be in force from and after July 1, 2021.
